Businesses Say California Needs 2030 Climate Target

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By Carolyn Whetzel

Aug. 5 — Several businesses and investment companies are pushing California lawmakers to extend the state's key climate policy before Aug. 31, the end of the current two-year legislative session.

“Action needs to happen this year to ensure our economic growth continues and in order to meet our greenhouse gas reduction goals in California and globally,” Kirsten James, a senior manager at Ceres in San Francisco, told Bloomberg BNA Aug. 5.

Hope for legislation extending the Global Warming Solutions Act of 2006 (A.B. 32) beyond 2020 dimmed this week, after State Senate President Pro Tempore Kevin De León and other Democratic leaders indicated pending legislation to set a 2030 emissions target may not have sufficient support.

Also, the office of Gov. Jerry Brown (D) said Aug. 5 his administration would take the effort to continue the state's climate policies to voters, if needed.

Ceres and executives from Trillium Asset Management, Dignity Health, Genentech Inc., General Mills, Levi Strauss & Co., Macroclimate LLC,, Novozymes, Sierra Nevada Brewing Co., and Xylim Inc. met with state lawmakers Aug. 3, urging their support of S.B. 32.

The bill aims to set a 2030 greenhouse gas emissions target of reductions 40 percent below 1990 levels. Introduced last year, S.B. 32 is opposed by the oil industry and a group of moderate Democrats.

Certainty Needed

Businesses and the investors Ceres is working with need the certainty a 2030 emissions target provides, James said.

Absent a 2030 emissions target, the predictability of California's climate program is eroding, Jonas Kron, a senior vice president at Trillium Asset Management, told Bloomberg BNA.

“What we're hearing from the companies we invest in, is the lack clarity about what happens past 2020, makes business planning more difficult,” Kron said. “As investors we take those statements seriously.”

“I'm really hopeful,” James said.

S.B. 32 author Sen. Fran Pavley (D) has “really listened” and amended the bill to address concerns and win support, James said. For example, S.B. 32 now includes only the 2030 target, not a longer-term 2050 goal, as it initially did, she said. Pavley also has worked with other lawmakers on pending companion measures, A.B. 197 and A.B. 1550, James said.

A.B. 197 would provide some legislative oversight over the California Air Resources Board implementation of climate policies. A.B. 1550 would ensure cap-and-trade auction revenue goes to low-income communities.

Industry Not On Board

The Brown administration has met with the oil industry and others opposed to passage of S.B. 32 but has been unable to gain industry support. De Leon and Assembly Speaker Anthony Rendon (D) also have tried to sway a group of moderate Democrats.

“Consumers and businesses deserve a climate policy developed through collaboration and effective leadership,” Dorothy Rothrock, president of the California Manufacturers & Technology Association, told Bloomberg BNA in an e-mail. “California manufacturers are ready and willing to work with the governor and legislative leadership to make the happen.”

The manufacturing group has questioned the effectiveness of the state's climate policies.

Oil industry officials could not be reached for comment. The Western States Petroleum Association, however, has lobbied for the state to abandoned its low-carbon fuel standard. The Brown administration has refused to do so.

Administrative Effort to Set Target

Meanwhile, the California Air Resources Board has proposed amendments to regulations governing the state's greenhouse gas emissions cap-and-trade program that would administratively establish a 2030 emissions target. The trading program is a key element of the state's plan to achieve its A.B. 32 mandate to cut carbon dioxide emissions to 1990 levels by 2020. Continuation of cap-and-trade also is central to state's strategy to comply with the federal Clean Power Plan.

If adopted next spring, as currently planned, CARB's emissions target would face litigation challenging the agency's authority to set an emissions target beyond 2020. Legislation setting the target could help avoid such challenges, attorneys have said.

Pending litigation challenging the cap-and-trade auction is another cloud hanging over the state's climate programs. A lawsuit filed by the California Chamber of Commerce alleged the auction is an illegal tax.

This Year, Next Year or Ballot

“Let's be clear: We are going to extend our climate goals and cap-and-trade program—one way or another,” Nancy McFadden, Brown's executive secretary said in a Twitter statement Aug. 4. “The governor will continue working with the Legislature to get this done this year, next year or on the ballot in 2018.”

Brown's office filed papers with the secretary of state Aug. 4 to launch a drive for a ballot measure called “Californians for a Clean Environment.”

A recent Public Policy Institute of California poll shows “Californians want to see this happen,” Natural Resources Defense Council attorney Alex Jackson told Bloomberg BNA.

“I don't think the prospect of a ballot measure should excuse the Legislature from doing its job,” Jackson said. “Their constituents want California” to continue its climate policies, he said. “We have not given up the fight for this year, nor will we ever.”

To contact the reporter on this story: Carolyn Whetzel in Los Angeles at cwhetzel@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com

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